In Re: Harold Wade and Lorraine Wade, Debtors-Appellants.
February 6, 2019
from the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division. No. 15-BK-01035 -
LaShonda A. Hunt, Bankruptcy Judge.
Kanne, Sykes, and Hamilton, Circuit Judges.
Harold and Lorraine Wade moved for sanctions against Kreisler
Law, P.C., alleging that the law firm violated the automatic
stay arising from their bankruptcy petition by filing a lien
against Lorraine's home. The couple had voluntarily
dismissed a prior bankruptcy petition just a few months
earlier, so the bankruptcy judge denied their motion based on
11 U.S.C. § 362(c)(3), which lifts the automatic stay
after 30 days in the case of a successive petition. But the
bankruptcy courts are divided over the proper interpretation
of § 362(c)(3), so the judge certified her order for
direct appeal to this court under 28 U.S.C. §
158(d)(2)(A). A timely notice of appeal followed.
Wades never filed a petition for permission to appeal as
required by Rule 8006(g) of the Federal Rules of Bankruptcy
Procedure. Kreisler moved to dismiss the appeal based on this
omission. We provisionally accepted the appeal and directed
the parties to address the effect of the procedural violation
in their merits briefs.
dismiss the appeal. Rule 8006(g) is a mandatory
claim-processing rule, and if properly invoked, it must be
enforced. See Hamer v. Neighborhood Hous. Servs. of
Chi., 138 S.Ct. 13, 17 (2017). Because Kreisler properly
objected, the appeal must be dismissed.
Wades filed a Chapter 13 bankruptcy petition in January 2015,
which automatically stayed any collection actions against
their property. See 11 U.S.C. § 362(a). But the
petition was successive-they had voluntarily dismissed a
different petition two months earlier-and § 362(c)(3)
states that if a prior petition "was pending within the
preceding 1-year period but was dismissed," the
automatic stay "shall terminate with respect to the
debtor on the 30th day after the filing of the later
how much of the stay was lifted became relevant after the
Wades discovered that Kreisler recorded a lien against
Lorraine's home in April 2015. Because their bankruptcy
case was active at that time, the Wades moved in the
bankruptcy court to sanction Kreisler for violating the stay.
parties disagreed about the meaning of § 362(c)(3).
Kreisler contended that it lifts the entire stay. The Wades
argued that the phrase "with respect to the debtor"
limits the statute's effect so that it lifts the stay
only for non-estate property. In their view the stay
still prevented Kreisler from recording the lien because
Lorraine's house was estate property.
bankruptcy judge denied the Wades' motion, concluding
that the entire stay lifted in February 2015, which validated
Kreisler's April 2015 lien. The Wades appealed to the
district court. But they also asked the bankruptcy judge to
certify her order for direct appeal to this court under
§ 158(d)(2)(A). The judge granted that request and
issued a certification order. The Wades then filed a notice
of appeal, but they never filed a petition for permission to
appeal as required by Rule 8006(g) of the Federal Rules of
Bankruptcy Procedure. Kreisler moved to dismiss based on this
procedural oversight. We provisionally accepted the appeal
but instructed the parties to brief the dismissal motion with
begin (and end) with the question whether the failure to file
a petition for permission to appeal requires dismissal of
this appeal. We are permitted to consider a direct appeal
from an order of the bankruptcy court if the bankruptcy judge
certifies the order for appeal and we "authorize the
direct appeal." 28 U.S.C. § 158(d)(2)(A). The
Federal Rules of Bankruptcy and ...